MICUK: Dealing With Family Wealth and Kids? Stop Thinking Profits

Benchmark Capital commercial director Gillian Hepburn has a stark warning about advisers missing the opportunities brought by family advice

Christopher Johnson 3 May, 2024 | 9:35AM
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Christopher Johnson: Hello, I'm with Gillian Hepburn at Morningstar's Investment Conference in London.

So, Gillian, my first question to you is, in your presentation you said that 61% of inheritors say they will not use their parents' advisers. So how can advisers keep younger clients?

Gillian Hepburn: It's a great starting question, isn't it? I think, first of all, it's just simply engaging with them. It's letting the next generation of your existing clients know that you exist, that I am the person that manages the family money and I'm here to help. And I do see a lot of advisers saying I'm not going to deal with that next generation because I don't have a proposition and I won't make any profit from them. This is not about profit. This is about retaining the wealth that you've worked really hard to create within the business and within the family. So, I think first of all, the first step is just to let them know who you are.

CJ: Are advisers missing out on the opportunity of dealing with female clients that are inheriting wealth at the moment? How can they engage this demographic of people?

GH: Yeah, 100%. I would say – I mean, our research shows us that only 34% of women are saying that they will stay with the adviser, the family adviser after the death of their partner or even after divorce. So, with that move away, we're seeing only 5%, interestingly, of advisers saying they've got a proposition to retain or even attract these female clients. So, I think the key thing to start with is about understanding these women and why are they moving. Why do they feel disengaged and what can we do about it?

And actually, the research showed the starting point was about just simple communication, understanding that these women are different, they think differently about money and about what they want to do with the family money. So again, it's back to that whole engagement piece in terms of not disengaging these women, engage the wider family.

So, what was really interesting is that often it's the next generation that influence that widow in terms of not remaining with the family adviser. So, I think it's an interesting dynamic here, isn't it? There is a challenge for many advisers if they're not doing it and these women are going to leave. Equally, there's a huge opportunity for advisers to hold themselves out as specialising in women and therefore attracting these clients that are looking for somebody who really understands them and wants to work with them.

CJ: Thank you, Gillian.

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Christopher Johnson  is data journalist at Morningstar

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